Everybody loves puppets. Watch people of all ages at a toy store – they pick one up and make it say funny things in funny voices. That human tendency to speak through other characters is at the root of the appeal of the blockbuster app Talking Friends – which at press time was measured at more than 325 million downloads, averaging close to 1 million downloads a day.

People of all ages are downloading onto their smart phones, iPads and other devices Talking Tom Cat, his friend Talking Ben the Dog, Gina the Giraffe and all the Talking Friends characters who appear on a device’s screen and can repeat what the users say. The characters also can be directed to perform certain functions – such as folding a newspaper, eating, drinking or belching, or even doing a newscast of the user’s own design – by prodding them through the phone’s touchscreen.

Videos can be assembled from these interactions. “Users can engage with and communicate with the characters,” explains Paul Baldwin, chief marketing officer of Outfit7 Inc., the creator of the Talking Friends brand. “We give them a camera, a movie set and items, and let them film their own mini-movie, and then share it with their friends.” Since launching in June 2010, more than 100,000 Talking Friends videos created by users will have been posted on YouTube by mid-January, Baldwin calculates. Every month more than 500,000 videos are created and shared on YouTube, Facebook and e-mail.

Among the other Talking Friends characters are Harry the Porcupine, Larry the Bird, Baby Hippo, Lila the Fairy, Talking Santa and Talking John. “We currently have 12 characters that we’ve launched going into 2012,” Baldwin notes. “You’ll see us do two things: one is continue to build new stories around existing characters, as well as introduce some new characters for the Talking Friends line.”

Prowling Online

Even though a character is only represented as an app for a mobile device, that doesn’t mean the character can’t be licensed into the three-dimensional world. When those products talk, the possibilities for engaging with them become even more exciting.

“The licensing business is just beginning to understand the importance of apps as licensable properties,” Beanstalk President and CEO Michael Stone points out. Beanstalk has established 10 key licensing partnerships for characters from Talking Friends with many more in the works. “This is the new frontier of entertainment licensing,” Stone says. “When you have this many eyeballs looking at a property every day, for months and months, you are being seen much more consistently and by a larger audience than any motion picture or television show. That has to mean something.”

Beanstalk handles licensing for major accounts such as Stanley Black & Decker, Procter & Gamble, Home and Garden Television, Crayola and the U.S. Army. It also represents a number of celebrities, such as Salma Hayek, Iman, David Tutera and Paris Hilton. The agency discovered Talking Friends through research. “We are always prowling around in the digital space, constantly looking for what’s on trend,” Stone recalls. “We found them, they found us, and it all came together very quickly last spring. When we first met Outfit 7, the apps had only been available for nine months.”

With all the licensing agencies available, Baldwin chose Beanstalk carefully. “They have fantastic brands, and they’ve had really strong success internationally, not just in North America,” he emphasizes. That international success is important for Talking Friends, whose development team is based in Slovenia. “The sensibility of the humor is a bit European in that regard,” Baldwin concedes. “When we launch a title – and it happens for every title we launch – no one in the world has our success. Our titles become No. 1 in their respective app store categories in over 100 countries everywhere across the globe.

“That’s because our characters resonate with people of all ages and nationalities,” he adds. “The ability to put your own personality into the character is extremely unique, and the worldwide affinity of the characters is why we picked Beanstalk. The global appeal made it extremely important to have an agency that had offices all over the world.”

International Characters

That international flavor is nurtured carefully due to the way the app is designed. “The characters have their own sounds and voices but only speak the user’s language,” Baldwin emphasizes. “That is another reason why we are an international success. We get e-mails weekly from people all over the world who say, ‘I can’t believe Tom speaks Mandarin or Italian.’ We always get a kick out of that.” The reason is that the characters repeat back whatever their users say in whatever language the user says it in.

Baldwin reports that in 2011, 40 percent of the Talking Friends downloads were from outside the United States, but he sees that increasing to 50 percent in 2012. The second highest number of downloads after the United States was in the United Kingdom, followed by China, Korea and the rest of Europe. “The growing international focus for us has been driven by the significant number of downloads outside of the U.S.,” Baldwin notes. “We are following our users.”

Localizing Talking Friends further is being considered. “There’s three layers of localization,” Baldwin explains. “One is simply putting the text in a local language – we do that. The second one is localizing the character names. We’re reviewing that in China. A third way is localizing the content itself. So Tom’s wardrobe is distinctively Chinese, or his apartment room feels like a Chinese apartment room, for instance.”

Expanded Apps

Another expansion of the Talking Friends characters is into additional app categories. Right now, Talking Friends is listed at online app stores where it is purchased in the entertainment category. But Baldwin sees expanding it into music, books and games. For example, of the 3,000 to 5,000 Talking Friends videos that are uploaded daily, usually at least half of them are people singing, Baldwin maintains.

“People are using the apps to sing, so now we’re going to give them more assets with which to create their songs,” Baldwin explains. “Games will be another area of focus; you will see Tom starring in a couple of games soon. Additionally, the Talking Friends crew will be coming soon to the book category, allowing us to offer more character and story development.”

Outfit 7 is devoting its creative energy to its current franchise. “Right now, we’re focused on the Talking Friends line,” Baldwin says. “Our focus is character creation and story development for the characters that live in the Talking Friends universe. In the future, I see us creating a new universe around other characters, but that’s not in the product road map right now.”

Baldwin’s first goal is to develop the characters further. “We want to extend the brand into new audience segments,” he resolves. “Each new medium the Talking Friends move to brings a new audience. And each new medium allows us to further develop the back story of each character in the Talking Friends franchise. If we’ve done both well, we’re going to broaden the brand’s appeal and drive ancillary revenue.”

Talking Friends t-shirts, holiday ornaments, drink ware, accessories and phone cases have been available at the online store since December 2011 at talkingfriends.com. “We worked hard at getting that up and running for the holiday season,” Stone declares. “This is enormous speed to market – to start talking about prospective licensees in June 2011 and by the end of March 2012 to have product on the shelf – to do all that in nine months, you can’t do it any faster.”

The products that are expected to showcase Talking Friends characters are apparel and accessories, footwear, sleepwear, home décor, collectibles and plush toys. Additional products debuting in 2012 include back-to-school, greeting cards and gift and novelty items.

The demographics of Talking Friends enthusiasts are broad. “Whether you’re 2 or 65, we have a high affinity rate – literally millions of downloads in each demographic category,” Baldwin notes. “It truly is an all-ages brand.” Much of the apparel is designed for those around the age of 12, but canvas shoes with the characters illustrated on them will be available in sizes from toddlers to adults.

Licensing Bonanza

Stone and Baldwin are enthusiastic about the licensing opportunities represented by an app like Talking Friends. “We’re just seeing the beginning of it, in my opinion,” Stone declares. “We’re in the early days.”

Baldwin is similarly enthusiastic. “What’s unique about the app space is that in the last couple decades, iconic brands were born from TV or film,” he points out. “Our thesis is because of the proliferation of smart devices people carry around everywhere, the next iconic character – a Harry Potter or a Dora – will not come from film or books or TV. They are going to come from the app space, because apps and the devices are ubiquitous, and because the nature of the devices allow people to interact with the brands unlike they were able to do before. I think that’s what really makes this unique. We’re at the forefront of the digital space.”